The post-Cold War era of globalization is ending, being replaced by a more chaotic, protectionist environment. This shift is exemplified by the high likelihood of a US-Europe trade war, with significant tariffs being imposed, which economic studies show are ultimately paid by domestic consumers.
Inflation is not dead but merely in remission. A new major burst is predicted within the next five years, not from typical economic cycles, but from the political unsustainability of managing the massive US national debt, which will force the Federal Reserve to choose between recession and inflation.
China's economy is undergoing a 'Japanification' process, marked by deflation, a housing crisis, and real growth rates far below official figures. In response to geopolitical pressures and the weaponization of the dollar (e.g., sanctions on Russia), China is accelerating its efforts to promote the Renminbi for international trade and loans.
The US military lacks the capacity to be the dominant power in Europe, the Middle East, and Asia simultaneously, especially as its defense budget has shrunk as a percentage of GDP. This reality, combined with unpredictable US foreign policy, is forcing allies like Europe to significantly increase their own defense spending and act as a geopolitical counterweight.
While AI is driving massive efficiency gains, its rapid advancement poses a risk of chaotic societal and workplace change that humanity may struggle to adapt to. In the near term, the next major financial crisis is more likely to originate from the less-regulated and volatile crypto market than from high valuations in AI-related stocks.
Keep pulling the thread on Kenneth Rogoff.